Gold and silver prices surged higher in midday U.S. trading on Thursday, with gold reaching a six-week peak and silver hitting a five-week high. This rally follows another subdued U.S. inflation report, reinforcing expectations that the Federal Reserve may soon lower interest rates. August gold rose by $38.70 to $2,418.40, while September silver increased by $0.601 to $31.615.
The June U.S. Consumer Price Index (CPI) showed a year-on-year increase of 3.0%, slightly below the forecasted 3.1% and a decrease from May’s 3.3%. The “core” CPI, excluding food and energy, rose 3.3% annually, also below the anticipated 3.4% and matching the previous month’s rate. The U.S. Producer Price Index report for June is scheduled for release on Friday morning.
Some analysts speculate that the Federal Reserve might cut interest rates at its next Federal Open Market Committee (FOMC) meeting on July 30-31. Contributing to this speculation, the U.S. dollar index fell to a four-week low, while Nymex crude oil prices slightly increased to around $82.25 per barrel. The yield on the benchmark 10-year U.S. Treasury note decreased to 4.177% following the milder CPI report.
Technically, August gold bulls hold a strong near-term advantage and gained further momentum today. The next upside price target for gold bulls is closing above solid resistance at the May contract high of $2,477.00. Conversely, the bears’ next objective is pushing prices below strong support at the June low of $2,304.20. Initial resistance is at today’s high of $2,430.40, followed by $2,450.00. Support is seen at $2,400.00 and then at today’s low of $2,376.80. Wyckoff’s Market Rating for gold is 7.5.
September silver futures bulls also hold a solid near-term technical advantage. Their next target is to close above solid resistance at the May high of $33.05. Bears aim to push prices below solid support at $30.00. First resistance is at today’s high of $32.015, followed by $32.50. Support is seen at $31.00 and then at this week’s low of $30.71. Wyckoff’s Market Rating for silver is 7.5.
